We’re not saying Hitler had any good ideas. But if he did, Operation Barbarossa was one of them.

A shot of our own medicine? Make it a double.

We’ve repeatedly mentioned the wisdom of buying, selling, and even window shopping on eBay, just to get a legitimate and unbiased idea of what your previously enjoyed wicker stool or T206 Honus Wagner card is worth. (For the latter, $500. We’ll even hand-deliver payment if you want.) We’ve also warned you to take precautions, using only PayPal for payments and not selling to anyone outside the United States. Or at least, outside the United States and Canada, assuming you’re OK with filling out a customs form or two. Or at least, outside the U.S., Canada, Australia, New Zealand, and Western Europe.

A couple of months ago we sold an iPhone 4S, functional but with a giant crack down its back, for $265. Our account specifies that we only do business within the United States, but the high bidder was a crook named Pavel Saltykov, user name sapavel, mario291@bk.ru, who lives or at any rate has an address on Rural Bogorodskaya, 19B 6, in Ufa, Bashkortostan. We could have refused his bid, but were feeling foolishly charitable of heart (that was our first mistake) and noted that he’d included more than enough to take care of shipping and duties, so we figured what the hell; let’s increase the level of international amity between former enemies by just a smidgen.

Now, as far as we’re concerned, the Cold War is back on. Reagan should’ve nuked them when he had the chance.

We’re not huge eBayers, maybe one transaction every couple of months. After Mr. Saltykov’s prompt payment we went to the post office, insured the package, got a customs form, kept copies of everything, etc. Mailed the iPhone out November 4. Two months passed and we never heard anything, so we figured everything was fine.

A fortnight ago, we received an email telling us the eBay account was in danger of suspension. Naturally, the initial reaction was “Spam. Come on, this is easy.” But the email didn’t look like spam, all its words were spelled correctly, and the return email address checked out as an eBay.com domain. A quick login to the eBay account showed that the Russian buyer did indeed open a complaint.

He opened it on Christmas Day. Sorry for not checking our eBay account every day in the event that someone files a claim without our knowledge (and for spending the day celebrating a little event called the birth of Christ, instead of being godless Commie heathens.) It bears mentioning that Saltykov never once tried to contact us directly, which eBay itself lists as its first recommended means of resolution. He just went straight to eBay. Our account showed that once he opened the claim on Christmas, we hadn’t responded in the allotted 7-day window. Granted, that was difficult to do, given that we didn’t know that a claim had been filed, let alone that the clock had started ticking. Excluding the most recent piece of correspondence, the email that we thought was spam, every word of this (extremely unilateral) conversation was in the form of eBay messages – which we’d only have seen if we’d happened to have logged into our account. Given that we had no items for sale, and weren’t shopping for anything, we had no reason to peruse our account; nor to see that we’d neglected to defend ourselves against a grievance that we never knew had been filed.

Only that day did eBay send us an email, rather than an internal message, saying in so many words, “We paid the guy on your behalf, now you owe us.”

Which prompted us to pick up the phone, given that eBay wasn’t letting us send an email (or even one of their stupid internal messages) with regard to this case. We called and said in considerably more polite terms than were justified that they had to be fricking kidding us, telling us that we now owed close to $300. Their email even included the ominous phrase “case closed.” The representative we talked to said, “Thanks for the proof that you sent it. But we don’t have proof that it was delivered.” Well excuse us for not being Russian Post.

So we tracked the package on the U.S. Postal Service’s site. The last thing they know, the iPhone was at an international holding facility in Los Angeles. A look at the publicly available tracking data for the package told us as much. Keep in mind, this is now more than 2 months since we mailed the damn thing. We called to find out where it is, the USPS opened up a case, and the representative said, “You know, you really should have opened your claim within 30 days.” We gritted our teeth and kept quiet. She said to give it 3 weeks, at which point we should have heard from either someone on the American side or the Russian side. She mentioned something about possible reimbursement, and seemed sincere.

If either postal service reimburses us, we had agreed to reimburse eBay. It seemed like the American thing to do. HOWEVER…

The reason eBay even demanded payment in the first place, rather than just forcibly removing it from us, is that the PayPal account linked to our eBay account had a zero balance. Blood from a stone, etc. A couple of days ago we received a PayPal deposit for an unrelated transaction, thus we had a positive balance. At that point eBay (with PayPal’s approval, seeing as the one is a subsidiary of the other) just up and took our money.

Takeaways:

A Russian can claim never to have received a package, and somehow that’s the fault of the American sender. Not to sound xenophobic here, but does a Russian eBay rookie with minimal transactions get the benefit of the doubt over a 12-year member with a 99% rating, from eBay’s home country no less?

eBay serves not only as judge, jury, and executioner, but also as plaintiff’s attorney, collection agency, and bounty hunter. With PayPal as its trusty deputy.

San Diego? No. Prices are too high and California is a test kitchen of awful laws.
Sharon, Massachusetts (Money magazine’s top place to live)? Similarly restrictive laws, with the added benefit of cold weather. Also, you’d be surrounded by Massholes.
San Francisco? “What’s this foul-smelling squishy thing I just stepped in? Why, it’s a homeless person. Yeah, another one. We’ve been walking on an unbroken carpet of them all the way from Fisherman’s Wharf. I hope the hypodermic needle that last one stabbed me with is at least infected with a treatable strain of hepatitis.”

Louisville, Colorado (also on Money’s list)? No offense, but we’ve never heard of you.

Money and common knowledge are idiots. Here’s our list, the definitive one. We’ll do them in ascending order, add to the drama. Presenting the 5 Best Places To Live in America:

5. An apartment you’re renting.

It’s not like we haven’t said this before, repetition being endemic to personal finance blogging, but every dollar you spend here is a waste. Think about the way this transaction works:

You: Hi! Here’s 1/4, maybe 1/3 of my gross income.
Landlord: Thanks. Here’s a floor. Oh, and I still get to keep it. I also get to keep your money.

You’re an adult, right? Then buy a house. Or at least a townhome or a condo. One more time: this is about building wealth. While wealth doesn’t drop out of the sky, at least for most people, it also doesn’t grow of its own accord. You need to start with the raw material, i.e. some amount of money, before you can do anything with, i.e. invest it. Renting, and thus forking over a big chunk of that investable money, handicaps you from the start. You have to live somewhere anyway, so why wouldn’t you build equity while doing so? Renting is a great way to enrich someone else.

Yeah, let’s hear it. “The housing market crashed and people got foreclosed upon. Why should I let those greedy mortgage companies have another opportunity to profit off my hide?”

The only people who got hurt by the housing “crisis”, which is now over, were those who were in over their heads in the first place. They bought too much house, they crossed their fingers in hopes of appreciation, and plenty of them lied about their income on their applications. (Just the same, those overmatched borrowers should probably blame the lending agents for believing their lies in the first place. Nothing is ever anyone’s own fault.) Being in over your head with anything, whether house payments, student loans or credit card debt is beyond the scope of this site anyway. Go join the other hand-wringers at the more querulous blogs if finding commiseration is more important to you than being rich is.

After a 4-year double nadir, prices and mortgage rates are finally rising but still historically low. You can use that as an excuse for not buying if you want, or you can see it as the tremendous opportunity it is.

No, you can’t afford a house when you begin the transition from student to wage-earner. Renting is an unfortunate necessity for most of us at some point in our lives. That point should be as early as possible. Save like your life depends on it – or your livelihood, which it does – until you’ve got enough for a down payment. Once you do, and if you’re motivated enough it shouldn’t take more than a few months, a standard monthly mortgage payment won’t be much more than what you’d otherwise pay in rent. And even if it is, you’re building wealth. Even in a bad-case scenario in which your home doesn’t appreciate as much as you’d like. Your house isn’t going to lose 100% of its value unless you live in Detroit. Your rent payment will lose 100% of its value every single time.

That is, unless you choose

4. An apartment you’ve signed a lease option for.

A lease option. It’s like an ordinary lease, except that at the end of the term you have the option (not the obligation) to buy the property. Lease option renters love this because they think that they’re building toward something, unlike the poor folks under item No. 5. Lease option holders are indeed in a better position than those who have no hope of buying their residences, but…

Care to guess how many lease option holders actually exercise the option? Here’s a quote from Maggie Hawk, who sells real estate in east-central Florida:

In 18 years selling real estate, I’ve never seen it happen.

Renters, by and large, embody certain characteristics. If you smoke, buy lottery tickets, own a pit bull, have a neck tattoo, have ever paid for a UFC pay-per-view, and/or have a couple of DUIs and should’ve walked on one of them but your lawyer screwed you over, it’s far more likely that you rent than own. If you hold a lease option you might think that by the end of the term you’ll have enough wherewithal to buy the place and take advantage of an unsuspecting landlord, but the real world shows a glaring paucity of such renters. Should you be disciplined enough to be one of the few renters who can capitalize on a lease option, you’ll do fine. And will eventually leapfrog over No. 3:

3. An apartment you’re sharing.

Life is going to have financially unhappy episodes. The idea is to compress them into as short a time as possible. If you’re dumb enough to have incurred credit card debt, paying it off in 9 months is always going to be better than just making one more splurge and then ending up taking 18 months to pay it off. Debt bloggers and the staff at MSN Money either don’t know or won’t acknowledge this, but that’s their problem.

Having roommates blows unless you’re one of those odd extroverted people who actually enjoy others’ company more than their own privacy, but again, it’s about minimizing the duration of the pain. Paying half or a third of the rent instead of all the rent means you’ll be on the road to No. 2 all the more quickly:

2. Your own home.

Congratulations. This is where it leads to. Read again from the top if you’re unclear. Equity buildup. Mortgage interest deductions. No matter how much you choose to insist that the glass is half-empty, and that renters are blessed because they don’t have to spend money on everything from landscaping to basic home repair, it’s hard to find a valid counterargument to the point that rent always gives a return of 0.

1. Your own 2nd home.

No one said you had to stop at one. Find a renter – God knows there are enough of them – and you can solve your residential cash flow deficiency easily. Repeat as necessary, and passive income goes from a nebulous concept into something tangible that can make a real difference in your life. It beats the hell out of obsessing over replacing your light bulbs with CFLs and keeping your tires properly inflated, too.

Once you’ve bought a first house, buying a second is surprisingly doable. And relatively easy to achieve if, as we’ve been saying since we learned how to talk, you buy assets and sell liabilities. It’s all in here.

Melvin’s busy making spacecraft, but as soon as he’s on his break he’d love to hear your analysis of heteronormative role play in modern media.

Of course, it already is unnecessary, but try telling that to the liberal arts majors who seem to be providing most of the vocal power for the latest rallying cry/hashtag. No less formidable a force than the President of the United States has made “college affordability” his latest pet cause, arguing that the marketplace of education should be subject to something other than natural laws.

Things cost what they cost. Prices, with exceedingly rare exceptions, are inversely correlated to quantities bought. When the price of gas rises, it might not affect your own driving habits perceptibly, but one person in a hundred or a thousand is going to say, “Screw it, I’m taking the bus.” And if Chico’s decides to knock a few bucks off the price of its Magique pull-on ankle pants, they’ll sell more pairs to more fashionable if budget-conscious women. Raising prices means lower demand. Meanwhile sales (in the sense of “discounts”) increase sales (in the sense of “revenue”.) This is so obvious that pointing it out hardly counts as cogitation.

College was historically expensive, which is why a) for centuries, hardly anyone went and those who did were rich, and 2) in the last couple of generations, parents started creating college funds for their progeny. Save today, spend on Junior 18 years from now. It wasn’t easy, but supposedly nothing worthwhile is.

As a quantifier of how far we’ve advanced as a society, we’re reminded that university attendance is way up and that a larger ratio of our college-age colleagues are heading for tertiary education than ever before. This is supposed to be a pure representation of prosperity, akin to rising per capita income or declining infant mortality. In a future utopia, 100% of high school seniors will attend Harvard, Yale, or the safety school of their choice (probably Penn.)

What percentage of age-appropriate people should be attending college? Far less than do now. The evidence is overwhelming:

The college graduate who works at a retail job, far from being a tragic anomaly, has gone beyond cliché and turned into a quotidian feature of life.

Just about every personal finance blogger on the planet – i.e., people who think they have some sort of qualification for talking about money – carries tens of thousands of dollars in student loans and doesn’t even seem embarrassed by the situation.

Tuition has outpaced inflation by about 150%. We’ll explain why this is in a minute.

Regarding the 3rd point above: when the federal government began the nationalization of education financing, that put downward (political) pressure on interest rates. After all, what’s the point of bureaucrats getting involved at the behest of our elected representatives if they can’t lower rates for the benefit of the voting public? Interest rates went from what the market would bear – i.e., where the lowest rate lenders were willing to offer matched the highest rate students and their parents were willing to pay – to something lower than that. Sallie Mae has no incentive to turn a profit in the same manner that independent lenders would, knowing that taxpayers can and will make up the difference.

The schools still operate with respect to the balance sheet, however. The University of Michigan might not be a for-profit venture in the same sense that DeVry or the University of Phoenix is, but the former still has an endowment to maintain and expenses to pay. Out of tuition and gifts mostly, and tuition monies are less subject to whim and variance than donations are. So…

If you’re a university, why not increase tuition far beyond its historic norms? You have tens of thousands of potential incoming students, all of whom have been convinced (or convinced themselves) that what you’re selling is indispensable. Throw a dead cat (its body donated by the biology department, where smart kids are learning marketable skills) and you’ll hit a professor (its body taking up space in the humanities department) who will argue that college education is a public utility of comparable import to electricity and water. The only difference is that the local power company is probably a mandated monopoly that’s forced by law to charge below-market rates that cover expenses and allow for a modest profit. Meanwhile, universities don’t operate under such constraints. If every university in the United States decided tomorrow to double its tuition, students would grumble, lead protests, wear Che Guevara shirts, listen to Rage Against The Machine, maybe even burn effigies of Richard Nixon, but they’d stillget their parents topay. Largely because they can’t see nor comprehend the price tags. I still have enough to pay for this week’s pot and hummus wraps, right? That’s all that matters. Besides, I don’t have to start paying back until I graduate.

Perverse incentives, again. Now you’ve just given Johnny Undergrad motivation for spending money and time on a master’s degree and deferring life even longer.

Debt will kill you, often creating a hole in 4 years that you can spend 8 times as long digging out of. It doesn’t matter: education remains a drug more desirable than the purest batch of crack. Maybe that’s the problem, a semantic one. “Education” implies a universal good, like “health” or “prosperity”. But education is what you get when you absorb and retain practical knowledge. Which indicates true education – knowing that Shakespeare intended Prospero to be an autobiographical character in The Tempest, or knowing that the duration of a vehicle’s spark line is based on total primary circuit resistance and coil voltage available?

Now, knowing which of those will remedy a weak fuel/air mixture and get someone’s car running smoothly? Okay, which of those can you learn only in an inexpensive community college or trade school? Finally, which will impress an employer (excluding deans of college English departments), and make a tangible difference in the world?

Stop complaining, and stop moving in a direction other than forward. When a significant portion of college students realize they’ll be better off elsewhere, those colleges will notice. When parents begin to acknowledge that the math will never pencil out on their daughter’s performing arts degree, purveyors of higher education will have no choice but to communicate more effectively to their clientele exactly what they’re getting for the money. And hopefully, our demagogues in charge will realize that the stated goal of higher enrolment shouldn’t be an end unto itself.

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Anti-tip of the Day

Spending money recklessly is good for government, good for business, and good for you.

~

You know how many products and services we’ve gone out of our way to plug in Control Your Cash’s history (excluding banner ads)?

Zero, until now.

Jason Hull is a certified financial planner who started with no particular advantages, yet has created multiple successful businesses and a new course that teaches you how to make lasting financial progress without dragging you down in minutiae nor repetition. And, he offers a money-back guarantee. The downside here is nonexistent. The upside is prodigious. Click the link now.